Business Law 5

6-7 Rawlsworth is an employee of General Sam Corporation. One of Rawlsworth’s jobs is to monitor the amount of particular pollutants and to record the results on a form that is submitted to the Environmental Protection Agency. This self-monitoring is required by law to ensure that firms limit the amount of particular pollutants they discharge. One day the firm’s equipment is malfunctioning, and so Rawlsworth records that the firm’s discharge is in excess of the lawful amount. When Matheson, Rawlsworth’s supervisor, sees what he has done, Matheson tells him to change the records to state that the firm is in compliance and, in the future, never to record such violations. When Rawlsworth calls the vice president to report this violation, he is told that the vice president does not take care of such matters and does not want to know about them. Rawlsworth then falsifies the records as instructed. When the falsification is discovered, who can be held criminally liable? Why?


6-8 Several corporations were convicted of violating the Sherman Act as a result of an unlawful agreement among their agents that the suppliers who supported an association to attract tourists would be given preferential treatment over those who did not contribute financially to the association. The corporations appealed on the grounds that the corporate agents involved were acting contrary to general corporate policy. Was the defense valid?


6-9 Defendant Laffal was the president of a corporation that operated a restaurant. It was alleged that prostitutes frequented the restaurant, picking up men there and returning them after a short time, thus making the restaurant an illegal “bawdy house” in violation of the state criminal law. Laffal argued that he could not be charged with operating a bawdy house because he was never present when any of the illegal acts took place and he did not even know they were going on. Was Laffal correct?


6-10 Evans was a loan officer for a bank and in this capacity had approved several loans to Docherty, all of which were legitimate and were repaid on time. Evans asked Docherty to apply for a loan from the bank for $2,000 and then to give the money to Evans, who would repay the loan. Evans explained that he could not obtain the loan himself because bank policy did not allow him to borrow from the bank. Docherty agreed. Was Evans’s or Docherty’s behavior illegal?

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